Cinedigm Announces Third Quarter Fiscal Year 2013 Financial Results

  Cinedigm Announces Third Quarter Fiscal Year 2013 Financial Results

   Year over Year Revenue and EBITDA Growth Driven by Strong Performance in
    Company’s Digital Cinema Installations and Content Entertainment Group

Business Wire

LOS ANGELES -- February 13, 2013

Cinedigm Digital Cinema Corp. (NASDAQ: CIDM), the global leader in the digital
distribution revolution, today announced financial results for the third
quarter fiscal 2013 which ended December 31, 2012.

Quarterly Highlights Include:

  *Consolidated revenues up 17% to $23.2 million and consolidated adjusted
    EBITDA increased to $14.5 million from $14.3 million in the year-ago
    period
  *Non deployment revenues up 53% to $9.6 million and non-deployment adjusted
    EBITDA up 58% from year-ago period to $2.2 million
  *Cinedigm’s domestic digital cinema deployment currently totals 11,697
    screens installed with 269 exhibitor partners; 835 screens installed in
    third quarter
  *Cinedigm’s movie release, “The Invisible War,” nominated for Academy
    Award® in the Best Feature Documentary category
  *13 independent films acquired to date

Third Quarter Fiscal 2013 Results

Revenues for the third quarter of fiscal 2013 were $23.2 million, a 17%
increase from $19.8 million in the third quarter a year ago. The increase in
revenues was primarily the result of strong performance in Cinedigm’s
Entertainment Group (CEG), including results from the New Video acquisition,
which closed in April 2012, as well as continued steady results from the
Company’s recurring revenue digital cinema servicing and software platforms.

In the third quarter of fiscal 2013, Adjusted EBITDA from continuing
operations totaled $14.5 million, an increase from $14.3 million in the
year-ago period. Excluding Cinedigm’s deployment business, Adjusted EBITDA
from continuing non-deployment operations was $2.2 million, an increase of 58%
from the year ago period and an increase of 81% from the previous quarter.
Non-Deployment EBITDA in the quarter included $0.4 million of film
distribution costs incurred in the quarter as CEG ramped up its film releasing
business, building toward a goal of 20-25 releases per year. These third
quarter distribution costs were incurred in advance of any home entertainment
revenues for those film releases, which will be realized in subsequent
periods.

Consolidated net loss decreased to $1.8 million or $0.03 per share for the
quarter compared to a consolidated net loss of $10.6 million or $0.28 per
share in the comparable prior year period, and a net loss of $2.6 million or
$0.06 per share in the preceding quarter.

Digital Cinema Deployment Highlights:

  *Cinedigm experienced the third highest installation quarter in its
    history, installing 835 digital systems as the Phase 2 installation period
    ended at January 31^st, 2013.
  *Cinedigm’s US and Canadian digital cinema deployment currently totals
    11,697 screens installed with 269 exhibitor partners, representing in
    excess of 70% of all North American exhibitors and approximately 40% of
    all North American digital cinema screens.
  *Cinedigm is finalizing contracts to bring its Virtual Print Fee (VPF)
    program to drive in movie theatres.
  *Also in the quarter, the Company signed its first large scale
    international deployment with Caribbean Theaters, with installations to
    commence in the fourth quarter.

Entertainment Distribution Highlights:

  *The Company’s fiscal year 2013 movie release, “The Invisible War,” was
    nominated for an Academy Award® in the Best Feature Documentary category
    and is one of the best reviewed movies of the year.
  *Cinedigm released two films theatrically in the third quarter fiscal 2013;
    “Citadel” and “In Our Nature.”
  *Cinedigm distributed 2,830 hours of film and TV content to more than 22
    digital partners.
  *Through the end of the quarter, Cinedigm’s live content on digital
    platforms totaled over 2,130 unique films and 365 seasons of TV comprising
    over 5,732 episodes.
  *Cinedigm acquired 714 hours of new movies and TV series, including the
    classic Toei Anime franchise “Digimon,” 22 new festival films from our
    Sundance partnership, and the top-rated series “Coast Guard Alaska” &
    “Coast Guard Florida” from Al Roker Entertainment.
  *With the recently acquired content, the Company's total library is over
    18,943 movies and television episodes.
  *Digital revenues increased 50% year-to-date versus industry average of
    28%.

Software Highlights:

  *Dan Sherlock joined in January as the new president of the software
    division.
  *Signed Southern for our exhibitor management system and our TCC-Enterprise
    system.
  *Signed LD Entertainment for our TDS product.
  *Internationally, software installations began in Ireland and the UK. The
    quarter also saw the Company sign the first large scale international
    deployment with Caribbean Theaters, who will begin installing our software
    in our fiscal fourth quarter. The company expects Australian and New
    Zealand installations to also commence in the fourth quarter.

“We are pleased that each of our divisions made significant operational
progress in the last quarter. We exceeded our goals for the now complete Phase
2 domestic deployment, expanded our footprint internationally, released two
independent films domestically with strong ancillary market pre-sales, grew
our feature distribution slate to 13 titles and further expanded our industry
leading home entertainment library with numerous film and television title
acquisitions,” said Chris McGurk, Chairman and CEO. “Importantly, garnering an
Academy Award® nomination for ‘The Invisible War’ has both dramatically
increased awareness of the critical issue of military sexual assault and
underscored that in year one as a complete digitally-focused studio, Cinedigm
is already making a big impact on the entertainment business.”

“We’ve consistently stated that fiscal year 2013 is a year focused on both
investment and growth,” added Adam Mizel, Chief Operating Officer and CFO.
“Cinedigm continues to benefit from the recurring revenues generated by its
installed systems, software maintenance fees, and the inherent operating
leverage embedded in its business model. With the completion of our domestic
Phase 2 deployment at January 31st, we are focused on expanding our
international servicing partnerships, as well as our exhibition and
distribution software client base. In addition, our strong independent film
slate and recent home entertainment acquisitions are setting us up for a
strong start to fiscal 2014.”

Nine-Month Fiscal 2013 Results

For the first nine months of fiscal 2013, revenues increased $7.8 million to
$66.7 million as compared to $58.9 million for the same period year ago.
Adjusted EBITDA from continuing operations year-to-date was $42.1 million,
compared to $44.8 million in the first nine months of the prior year
reflecting the reduced virtual print fees due to unexpected shifts in the
breadth and timing of various major studio movie releases in July and August.
Consolidated net loss decreased to $9.5 million or $0.21 per share for the
first nine months of the fiscal year compared to a consolidated net loss of
$17.3 million or $0.49 per share in the comparable prior year period.

Fiscal 2013 Outlook

Cinedigm is reaffirming its fiscal 2013 guidance and expects consolidated GAAP
revenues including its deployment units of $91-$97 million, and consolidated
Adjusted EBITDA of $57-$59 million in Fiscal 2013. The Company is also
reaffirming that it expects fiscal 2013 Adjusted EBITDA from non-deployment
operations of $6.7-$7.7 million.

Adjusted EBITDA is defined by the Company for the periods presented to be
earnings before interest, taxes, depreciation and amortization, other income,
net, stock-based expenses and compensation, merger and acquisition costs, and
certain other items. Pursuant to the requirements of Regulation G, the Company
has provided a reconciliation in the tables attached to this release of
Adjusted EBITDA to U.S. GAAP net income (loss). The Company calculated and
communicated Adjusted EBITDA in the tables because the Company's management
believes it is of importance to investors and lenders by providing additional
information with respect to the performance of its fundamental business
activities. The Company's calculation of Adjusted EBITDA may or may not be
consistent with the calculation of this measure by other companies in the same
industry. Investors should not view Adjusted EBITDA as an alternative to the
U.S. GAAP operating measure of net income (loss). In addition, Adjusted EBITDA
does not take into account changes in certain assets and liabilities as well
as interest and income taxes that can affect cash flows. Management does not
intend the presentation of these non-GAAP measures to be considered in
isolation or as a substitute for results prepared in accordance with U.S.
GAAP. These non-GAAP measures should be read only in conjunction with the
Company's consolidated financial statements prepared in accordance with U.S.
GAAP.

Conference Call

Cinedigm will host a conference call to discuss its financial results at 4:30
p.m. EST on February 13, 2013. The conference call can be accessed by dialing
(877) 754-5303 or for international callers by dialing (678) 894-3030 at least
five minutes prior to the start of the call. No passcode is required. The
earnings call will also be broadcast live over the Internet and can be
accessed on the Investor Relations section of the Company’s Web site at
http://investor.cinedigm.com/events.cfm. To listen to the live webcast, please
visit the site prior to the start of the call in order to register, download
and install any necessary audio software.

For those unable to participate during the live broadcast, a replay will be
available beginning February 13, 2013 at 5:30 p.m. EST, through February 20,
2013 at 11:59 p.m. EST. To access the replay, dial (800) 585-8367 (U.S.) or
(404) 537-3406 (International) and use passcode: 96792519.

About Cinedigm

Cinedigm is a leader in the digital entertainment revolution. Cinedigm's
pioneering digital cinema deployment and servicing efforts, and our
state-of-the-art distribution and exhibition software, are cornerstones of the
digital cinema transformation. Cinedigm is also the leading digital aggregator
of independent content in the world, providing end-to-end digital content
delivery to theaters, across digital and on-demand platforms, and on
DVD/Blu-ray. Through partnerships with iTunes, Netflix, Amazon, Google, Hulu,
Vudu, Xbox, Playstation, and others, Cinedigm reaches a global digital
audience. The company’s library of over 5,000 titles includes award-winning
documentaries from Docurama Films®, next-gen indies from Flatiron Film
Company® and acclaimed independent films and festival picks through
partnerships with the Sundance Institute and Tribeca Film. CEG is proud to
distribute many Oscar®-nominated films including “The Invisible War,” “Hell
and Back Again,” “GasLand,” “Waste Land” and “Paradise Lost 3: Purgatory.”
Upcoming multi-platform releases include “Don’t Stop Believin’: Everyman’s
Journey,” “Come Out And Play,” “Arthur Newman,” and “Violet and Daisy.”
Cinedigm™ and Cinedigm Digital Cinema Corp™ are trademarks of Cinedigm Digital
Cinema Corp www.cinedigm.com. [CIDM-E]

Safe Harbor Statement

Investors and readers are cautioned that certain statements contained in this
document, as well as some statements in periodic press releases and some oral
statements of Cinedigm officials during presentations about Cinedigm, along
with Cinedigm's filings with the Securities and Exchange Commission, including
Cinedigm's registration statements, quarterly reports on Form 10-Q and annual
report on Form 10-K, are "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995 (the "Act").
Forward-looking statements include statements that are predictive in nature,
which depend upon or refer to future events or conditions, which include words
such as "expects," "anticipates," "intends," "plans," "could," "might,"
"believes," "seeks," "estimates" or similar expressions. In addition, any
statements concerning future financial performance (including future revenues,
earnings or growth rates), ongoing business strategies or prospects, and
possible future actions, which may be provided by Cinedigm's management, are
also forward-looking statements as defined by the Act. Forward-looking
statements are based on current expectations and projections about future
events and are subject to various risks, uncertainties and assumptions about
Cinedigm, its technology, economic and market factors and the industries in
which Cinedigm does business, among other things. These statements are not
guarantees of future performance and Cinedigm undertakes no specific
obligation or intention to update these statements after the date of this
release.

CINEDIGM DIGITAL CINEMA CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data)

                                           December 31, 2012  March 31, 2012
ASSETS                                      (Unaudited)
Current assets
Cash and cash equivalents                   $     17,321        $    17,843
Restricted available-for-sale investments         —                  9,477
Accounts receivable, net                          38,538             24,502
Deferred costs, current portion                   2,199              2,228
Unbilled revenue, current portion                 7,982              7,510
Prepaid and other current assets                  7,249              1,121
Note receivable, current portion                  478                498
Assets held for sale                             —                 214
Total current assets                              73,767             63,393
Restricted cash                                   5,751              5,751
Security deposits                                 241                207
Property and equipment, net                       178,275            200,974
Intangible assets, net                            14,439             466
Capitalized software costs, net                   6,650              5,156
Goodwill                                          7,101              5,765
Deferred costs, net of current portion            3,481              5,080
Unbilled revenue, net of current portion          611                617
Accounts receivable, long-term                    1,602              773
Note receivable, net of current portion           134                465
Investment in non-consolidated entity,           2,830             1,490
net
Total assets                                $     294,882       $    290,137


CINEDIGM DIGITAL CINEMA CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data)
(continued)

                                           December 31, 2012  March 31, 2012
LIABILITIES AND STOCKHOLDERS’ DEFICIT       (Unaudited)
Current liabilities
Accounts payable and accrued expenses       $   42,983          $  20,854
Current portion of notes payable,               33,562             35,644
non-recourse
Current portion of capital leases               230                186
Current portion of deferred revenue             4,556              3,677
Current portion of contingent                   750                —
consideration for business combination
Liabilities as part of assets held for         —                75        
sale
Total current liabilities                       82,081             60,436
Notes payable, non-recourse, net of             103,726            135,345
current portion
Notes payable                                   94,442             87,354
Capital leases, net of current portion          5,051              5,244
Interest rate swaps                             750                1,771
Deferred revenue, net of current portion        11,464             11,451
Contingent consideration, net of current        3,094              —
portion
Customer security deposits, net of             —                9         
current portion
Total liabilities                              300,608          301,610   
Commitments and contingencies
Stockholders’ Deficit
Preferred stock, 15,000,000 shares
authorized; Series A 10% - $0.001 par
value per share; 20 shares authorized; 7
shares issued and outstanding at December       3,439              3,357
31, 2012 and March 31, 2012,
respectively. Liquidation preference of
$3,589
Class A common stock, $0.001 par value
per share; 118,759,000 and 75,000,000
shares authorized; 48,446,468 and
37,722,927 shares issued and 48,395,028         48                 38
and 37,671,487 shares outstanding at
December 31, 2012 and March 31, 2012,
respectively
Class B common stock, $0.001 par value
per share; 1,241,000 and 15,000,000
shares authorized; 1,241,000 and                —                  —
1,241,000 shares issued and 0 and 25,000
shares outstanding, at December 31, 2012
and March 31, 2012, respectively
Additional paid-in capital                      221,817            206,348
Treasury stock, at cost; 51,440 Class A         (172       )       (172      )
shares
Accumulated deficit                            (230,858   )      (221,044  )
Total stockholders’ deficit                    (5,726     )      (11,473   )
Total liabilities and stockholders’         $   294,882        $  290,137   
deficit


CINEDIGM DIGITAL CINEMA CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share data)
(Unaudited)

                  For the Three Months             For the Nine Months
                   Ended December 31,                Ended December 31,
                    2012          2011           2012          2011       
Revenues           $ 23,212         $ 19,793         $ 66,725         $ 58,862
Costs and
expenses:
Direct operating
(exclusive of
depreciation and     3,169            2,104            8,532            5,394
amortization
shown below)
Selling, general
and                  6,265            4,303            18,464           11,784
administrative
Provision for
doubtful             72               —                226              —
accounts
Research and         38               72               112              162
development
Merger and
acquisition          —                —                1,267            —
expenses
Restructuring        —                832              340              832
expenses
Depreciation and
amortization of      9,155            8,996            27,372           26,719
property and
equipment
Amortization of
intangible          739            84             1,120          253        
assets
Total operating     19,438         16,391         57,433         45,144     
expenses
Income from          3,774            3,402            9,292            13,718
operations
Interest income      2                21               20               96
Interest expense     (6,690     )     (7,603     )     (21,444    )     (22,543    )
Income (loss) on
investment in        678              (343       )     1,340            (343       )
non-consolidated
entity
Other income,        103              175              494              606
net
Change in fair
value of            349            597            1,025          29         
interest rate
swap
Net loss from
continuing           (1,784     )     (3,751     )     (9,273     )     (8,437     )
operations
Loss from
discontinued        —              (6,889     )    (274       )    (8,826     )
operations
Net loss             (1,784     )     (10,640    )     (9,547     )     (17,263    )
Preferred stock     (89        )    (89        )    (267       )    (267       )
dividends
Net loss
attributable to    $ (1,873     )   $ (10,729    )   $ (9,814     )   $ (17,530    )
common
stockholders
Net loss per
Class A and
Class B common
share - basic
and diluted:
Loss from
continuing         $ (0.03      )   $ (0.10      )   $ (0.20      )   $ (0.24      )
operations
Loss from
discontinued       $ —             $ (0.18      )   $ (0.01      )   $ (0.25      )
operations
                   $ (0.03      )   $ (0.28      )   $ (0.21      )   $ (0.49      )
Weighted average
number of Class
A and Class B
common shares       48,320,257     37,620,287     47,254,337     35,800,878 
outstanding:
Basic and
diluted


Following is the reconciliation of the Company's consolidated Adjusted EBITDA
to consolidated GAAP net loss from continuing operations for the three and
nine months ended December 31, 2012 and 2011:

                                     For the Three Months Ended December 31,
($ in thousands)                          2012                2011     
Net loss from continuing              $    (1,784    )        $   (3,751   )
operations
Add Back:
Amortization of capitalized                302                    130
software costs
Depreciation and amortization of           9,155                  8,996
property and equipment
Amortization of intangible assets          739                    84
Interest income                            (2        )            (21      )
Interest expense                           6,690                  7,603
Other income, net                          (103      )            (175     )
Income on investment in                    (678      )            343
non-consolidated entity
Change in fair value of interest           (349      )            (597     )
rate swap
Stock-based expenses                       43                     142
Stock-based compensation                   513                    561
Restructuring expenses                     —                      832
Allocated costs attributable to           —                    119      
discontinued operations
Adjusted EBITDA                       $    14,526            $   14,266   
                                                              
Adjustments related to the Phase
I and Phase II Deployments:
Depreciation and amortization of      $    (8,986    )        $   (8,820   )
property and equipment
Amortization of intangible assets          (13       )            (12      )
Income from operations                     (4,159    )            (4,275   )
Intersegment services fees earned         845                  245      
(1)
Adjusted EBITDA from                  $    2,213             $   1,404    
non-deployment businesses

(1) Intersegment revenues of the Services segment represent service fees
earned from the Phase I and Phase II Deployments.


Following is the reconciliation of the Company's consolidated Adjusted EBITDA
to consolidated GAAP net loss from continuing operations:

                                     For the Nine Months Ended December 31,
($ in thousands)                          2012               2011      
Net loss from continuing              $    (9,273    )       $   (8,437    )
operations
Add Back:
Amortization of capitalized                829                   494
software costs
Depreciation and amortization of           27,372                26,719
property and equipment
Amortization of intangible assets          1,120                 253
Interest income                            (20       )           (96       )
Interest expense                           21,444                22,543
Other income, net                          (494      )           (606      )
Income on investment in                    (1,340    )           343
non-consolidated entity
Change in fair value of interest           (1,025    )           (29       )
rate swap
Stock-based expenses                       343                   704
Stock-based compensation                   1,527                 1,479
Merger and acquisition expenses            1,267                 —
Restructuring expenses                     340                   832
Allocated costs attributable to           —                   623       
discontinued operations
Adjusted EBITDA                       $    42,090           $   44,822    
                                                             
Adjustments related to the Phase
I and Phase II Deployments:
Depreciation and amortization of      $    (26,890   )       $   (26,330   )
property and equipment
Amortization of intangible assets          (39       )           (39       )
Income from operations                     (13,563   )           (16,312   )
Intersegment services fees earned         2,661               3,323     
(1)
Adjusted EBITDA from                  $    4,259            $   5,464     
non-deployment businesses

(1) Intersegment revenues of the Services segment represent service fees
earned from the Phase I and Phase II Deployments.

Contact:

Cinedigm
Jill Newhouse Calcaterra, CMO
424-281-5417
jcalcaterra@cinedigm.com